Several rural commercial banks are raising interest rates against the trend, with the three-year fixed deposit rate increased to over 1.9%.

As major state-owned banks are simultaneously delisting five-year large-denomination certificates of deposit and one-year fixed deposit rates generally fall below 1%, many regional small and medium-sized banks are raising interest rates against the trend at the start of 2026, with some rural commercial banks increasing three-year fixed deposit rates to 1.9% or higher.

Specifically, Guangxi Zhaoping Rural Commercial Bank launched the “Zhaoying Premium · Jinma Sending Blessings” special deposit product on February 1, 2026. The three-year rate reaches 1.9%, with a minimum deposit of 200,000 yuan. The offering runs until the end of March, available by appointment, and on a first-come, first-served basis.

Guizhou Xifeng Rural Commercial Bank introduced a special deposit product with a three-year rate of 2.05% and a five-year rate of 2.1%, with a low minimum deposit of 50 yuan.

Jiangsu Jianhu Rural Commercial Bank offers a 1.8% rate on three-year deposits over 200,000 yuan, implementing a tiered pricing strategy; Inner Mongolia Rural Commercial Bank’s Tuoketuo branch sets the same minimum deposit of 200,000 yuan and a universal threshold of 100 yuan for inclusive finance.

Zhejiang Jiashan Rural Commercial Bank divides the three-year deposit interest rate into tiers based on the amount, with 1.75% for deposits starting at 10,000 yuan, 1.80% for 100,000 yuan, and 1.85% for 200,000 yuan.

Shanxi Shangnan Rural Commercial Bank increased the fixed deposit rates for 3 months, 6 months, 1 year, and 2 years by 15, 14, 15, and 15 basis points respectively. Although the report did not specify the exact three-year rate, the bank participated in this wave of rate hikes.

Analysts believe that while small and medium-sized banks may raise rates temporarily to attract deposits, the long-term trend is for deposit rates to continue declining. It is expected that in 2026, large-denomination certificates of deposit will remain at low levels, with some banks issuing slightly higher-rate products due to short-term liquidity needs, but overall interest rate levels will not significantly rise.

In fact, both large and small banks face the same operational challenge—the continuous narrowing of net interest margins. According to the State Financial Regulatory Administration, as of the end of Q3 2025, the net interest margin of commercial banks had fallen to a historic low of 1.42%, well below the prudential regulatory level of 1.8%.

Multiple brokerage research reports generally forecast that in 2026, banks’ net interest margins will narrow less and stabilize at the bottom.

CITIC Securities predicts that the decline in bank net interest margins in 2026 will narrow to about 4 basis points, marking the first single-digit annual decline since 2022. Kaiyuan Securities expects a slight narrowing of 4 basis points next year, with most of the pressure concentrated in the first half of the year.

Guoxin Securities believes that the decline in China’s banking sector net interest margin will significantly converge next year, likely marking the end of this cycle of margin compression.